Microsoft Ready For a Breakout Summer

Bobby is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

A number of different Microsoft (NASDAQ: MSFT) news articles have surfaced over the past few days, and things are looking fairly good for the stock.

Perhaps the most notable move on the part of the company is that it has changed its "end-user license for unspecified consumer software and hardware products." The result of this change is that you will no longer be able to engage in class action lawsuits involving Microsoft products. If a customer has a problem that Microsoft cannot handle informally, the customer can still bring the case to small claims court or arbitration. This actually gives the company an increased incentive to resolve any disputes before they reach the point where they go to arbitration court. This change is also offering incentives to plaintiffs to resolve the issue before the claims go any further.

Microsoft recently announced that a new Amazon.com (NASDAQ: AMZN) Instant Video app is now available for Microsoft's Xbox 360. This is an application that will allow Xbox users to watch videos from Amazon. This has been possible for a while, but it was not user-friendly in any way. The system is now far easier to use and more enjoyable for Xbox users. It must be noted, however, that there are a number of technical requirements that an Xbox will have to meet before the service will work. Regardless, this is the kind of thing that I want to see from a tech stock, as Microsoft is driving towards improving the experience of users and introducing new methods for doing things. This is a necessary application that will improve Microsoft stock.

In other news, Microsoft has released a rather unsurprising report. Malware has increased over the last few years, and the chances are high that it will continue to increase in the years to come. There are so many viruses floating around the Internet in so many forms, one can hardly keep track of them anymore.

This does not excuse the issue though, and I do not feel like it is enough for the company to identify the problem. It also has to present its customers with a solution. We have come to accept that the hackers will always catch up with modern technology, but that does not mean we want tech companies to give up on the issue. It is important that Microsoft introduces new ways to protect its customers and itself from malware. Furthermore, this will also help the company protect its stock. People are far more likely to support a company that can prove it has their best interests at heart, so this event will likely have a negative impact on Microsoft stock.

In better news, there are a number of rumors floating around about certain partnerships that could work in Microsoft's favor in the near future.

For one thing, it seems that there is a good chance that Facebook (NASDAQ: FB) will decide to purchase Nokia (NYSE: NOK). This is a good move for the tech company. Facebook has realized that if it wants to make its mark as a tech stock, it will have to enter the smartphone market. One expert believes that this purchase will in fact lead to the creation of the "FacePhone." This is good for Microsoft, as Nokia and Microsoft have had a partnership for a long time now. In recent developments, for example, Nokia has begun supplying traffic data for Bing maps. Bing is still far behind Google (NASDAQ: GOOG), the leading search engine at the moment, and it seems to me that this purchase would be good for both Microsoft and Nokia. Microsoft's Bing could become a serious competitor to Google with a little bit of help. If the three companies-Microsoft, Nokia, and Facebook-begin working together, this could be quite a strong force in the industry.

There are those that believe Microsoft should avoid buying Nokia at all costs. Since the two companies have been collaborating on a number of different applications, it would seem almost like the most logical move for Microsoft. There are some convincing arguments, however, against this move. This is mostly just public opinion, but the prevailing idea seems to be that Nokia should abandon Microsoft and move to Android, which will benefit both companies. Whether or not this is true, we have not heard any recent rumors about Microsoft planning to purchase Nokia. For now, the worried-but-mostly-silent masses can relax.

Oracle (ORCL) and Google's war over the use of Java software in Android phones is nearing an end. This will be relieving for investors in both companies who just want them to get back to doing what they are supposed to be doing-making money.

Oracle owns Java, but since Java is a programming language, it cannot patent certain aspects of it. Nevertheless, Oracle sued Google for using Java script in its Android phones. The jury agreed that Oracle holds the patent to the Java software, but it also decided that it could not keep Google from using it in its phones. This is a big blow for Oracle, as it was hoping for huge payouts that it would have earned due to the success of the Android phones.

Oracle will also soon enter a legal battle with Hewlett-Packard (HPQ) regarding an agreement related to the Itanium processors. This certainly makes me wonder about the stability and future of the tech company, especially considering the poor results of its lawsuit with Google.

Aside from the malware issue, Microsoft seems to be in a good position. It is continuing to improve the experience of its customers and may even benefit from Facebook's potential purchase of Nokia. It is certainly in a better position than companies like Oracle that continue to get caught up in a mass of lawsuits. I believe that Microsoft stock will be on the rise in the next few months. The malware issues will likely only slightly dampen the increases.


BobbyFisher has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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